When natural disasters strike in developing countries, households are often forced to choose between preserving assets or destabilizing consumption: either can result in permanent consequences. In this paper we ask: can insurance transfer risk in a way that reduces the need for households to rely on costly coping strategies that undermine their future productivity? Since 2010, pastoralists in n...

This study examines the impact of multiple shocks on assets by employing two waves of a panel data set of 360 rural households in three agro-ecological zones in Kenya. To control for unobserved heterogeneity, a ‘within’ household fixed effects model was employed. One major finding is that climatic shocks negatively affect households’ livestock holdings -apart from small ruminant and non-ruminan...

Agricultural ecosystems are dependent for their natural resources on originally natural ecosystems. Agricultural ecosystems are also served by natural ecosystems with ecosystem services. Livestock will play a more important role in the next millennium because of the rising demand for animal food in the developing countries. Structural changes in land use through intensification of mixed farming...

Abstract Agricultural (index) insurance for smallholders in developing countries has gained traction academic and policy circles. The expectation is that the uptake of will protect from production shocks incentivize them to modernize production. We develop a simple theoretical model demonstrate welfare effects are fundamentally ambiguous—even absence transaction costs or basis risk. second-best...

Lack of access to formal insurance market may prevent farmers from pursuing risky production activities with potentially large returns. How does access to formal microinsurance affect production and economic development? We report results from a large randomized field experiment conducted in southwestern China in the context of a subsidized insurance for sows. We induce exogenous variation in i...

Livestock makes an important contribution to the livelihood of Sahelian farmers and herders and is a source of self-insurance against income shocks. By allocating livestock efficiently over space, spatial market integration should foster a sustainable use of pasture resources. It is also expected to favor the sharing of risk across regions by smoothing idiosyncratic price variations. Using mont...

Ample evidence exists to suggest that nonlinear asset dynamics can give rise to an environ­ ment of poverty traps. When dynamic asset thresholds matter, asset insurance offers great promise for managing risks that vulnerable households face. In this paper, we use dynamic programming techniques to generate an option value measure of welfare gains attributable to asset insurance in this context. ...